Goldpost estimates 1989 cash flow of $9 million

With operating costs of $57 per ton on a 500-ton-per-day basis indicated by engineering studies, Goldpost Resources (TSE) could achieve cash flow of $9 million in 1989 when production of 25,000 oz gold is forecast, President Patrick R. Heenan told the annual meeting.

This is based on gold recovery of 90% or better, a figure that could be improved to as high as 95% with further metallurgical studies.

The company expects production will increase to 35,000 oz annually when initial production objectives have been reached and operations are stabilized with the Hislop East property producing 450 tons daily and the adjoining Hislop West producing 50 tons daily.

Average grade of mill feed is expected to be about 0.23 oz gold per ton. With gold prices at or near current levels, this would yield an operating margin of approximately $300 per oz gold produced.

Heenan pointed out that reserves in the Hislop East property are drill- indicated to the 350-ft level except in the shaft area where drilling and drifting take reserves to the 450- ft horizon. Below this, however, deeper drilling has suggested the persistence of reserves to lower horizons, with one notable hole being No 160 which intersected 27 ft assaying 0.52 oz gold.

Hislop East reserves are calculated at 614,000 tons but if this were extrapolated to the 1,000-ft horizon, Heenan said, “We are dealing with a probable and proven tonnage of 1,800,000 tons grading 0.194.”

On the Hislop West property, minimal reserves equal to 100 tons per vertical foot of a grade “considerably better than 0.50 oz gold per ton” have been indicated.

“We are optimistic about developing a substantially higher tonnage in this area,” Heenan stated, pointing out there are areas which have only been tested by some surface drilling.

Underground work is proceeding satisfactorily on both properties. The shaft decline on the Hislop East, where the objective is to open the 600-ft horizon, is about one- third complete and has penetrated the 180-ft elevation. The decline to the south is about 60% complete.

Diamond drilling has started on the Gold Hill Mines project in the state of Idaho, the meeting was told. This is testing the Gold Hill vein on the previously undrilled Eisler claim, and also disseminated stringer zones. The Gold Hill is a former producer which yielded 391,460 oz gold.

Drilling is also scheduled for the Reserve Creek properties in the Fort Frances area of Northwestern Ontario. A zone in which previous drilling gave intersections of up to 0.31 oz over 48 ft, will be drilled, along with two other structures.